What’s the Difference between Hard and Soft Money in Politics?

How do I know what type of political contribution to make?

In our years representing clients and their interests in front of Ohio’s political leaders, the lobbyists of Grant Street Consultants are often asked about the ins and outs of donating to political campaigns. One specific question we hear often lately is, “What is the difference between hard and soft money in politics?”

The short answer is that “hard money” is the cash or checks contributed directly to a political candidate. These dollars can only come from an individual or a political action committee (PAC).

“Soft Money” is more indirect and is meant to support a political cause. The biggest differences between the two are:

Corporations, in addition to individuals, are permitted to make “soft money” contributions

There are no limits to the amount of dollars an individual or corporation can contribute through “soft money”. It is often referred to as “dark money” because its contributors generally remain anonymous, but expenditures do not.

The Federal Election Commission is the entity that governs federal election campaigns and limits – but each state has their own limits on campaign contributions as well as their own reporting requirements. And to make matters even more confusing, different rules exist for “hard” and “soft” money donations. So, it is to your benefit to be aware of the relevant laws that have been established by the Federal Election Commission before you make any campaign contributions. Grant Street Consultants has decades of experience in guiding our clients through the maze of campaign finance laws and provides critical guidance in identifying the type of contribution that best suits their individual goals.

The 2010 Supreme Court case Citizens United v. Federal Election Commission ruled that “soft money” contributions can be unlimited because they constitute a form of free speech and is protected by the First Amendment. However, the law states that soft money is only to be used for “party-building activities,” such as advocating the passage of a law and voter registration, and not for advancing a specific candidate in an election.